The British Airways chief executive, Willie Walsh, has rounded on the Conservative party in the wake of the Committee on Climate Change report into aviation and warned that it will make the "biggest mistake ever" if it blocks a third runway at Heathrow.

In a tirade at one of David Cameron's flagship policies, the boss of Heathrow's largest airline said the party's line on airport expansion was incoherent and "seriously undermined" the opposition's environmental credentials.

Walsh's comments follow the publication today of a report by the government's advisory panel on climate change, which makes the case for a third runway by admitting that British airports can handle up to 140 million more passengers a year by 2050.

The shadow transport secretary, Theresa Villiers, said the Tories stood by their policy and warned that a third runway would exact a "horrendous price" on the environment.

Warning that scrapping a third runway would be a major error, Walsh said: "We will look back years from now and say, what a disgrace."

He added: "We expect governments to have policies that are coherent. I don't see this as coherent."

Walsh also used the economic case for expanding Heathrow – that major businesses need well connected local airports in order to thrive – to attack the Conservative stance.

"I want to know if the Conservatives don't want to build a third runway how are they going to position the UK economy to compete on a global scale in the future."

Walsh said the Conservative embargo on new runways at Heathrow, Stansted and Gatwick – the UK's three largest airports – carried no environmental benefit because the party refused to rule out expansion elsewhere. "Their environmental credentials are seriously undermined," he said.

BA's close rival Virgin Atlantic also joined in the attack at a conference hosted by the Airport Operators Association in London. Steve Ridgway, Virgin Atlantic chief executive, said : "It is very difficult where they [the Tories] are at the moment. It is wrong in terms of what this country needs and there is a job to be done in terms of convincing them that this is the right thing to do. Somehow we have to find a way to convince them."

Colin Matthews, chief executive of BAA, the owner of Heathrow, said the need for a new runway at Heathrow "has been there for years".

The Conservative party today stood by its commitment to block new runways at Heathrow, Stansted or Gatwick, despite the Committee on Climate Change findings that it would be possible to expand Heathrow, Stansted and Edinburgh without breaching greenhouse gas emission targets. The government has ruled that carbon dioxide emissions from the aviation industry in 2050 must not exceed 2005 levels.

"We have got a coherent, well thought-through and principled position on Heathrow expansion. We very strongly believe that the environmental costs of a new runway would outweigh any potential economic benefits," Villiers said.

Asked how the Conservatives would manage their relationship with BA if they won the election, she said: "I am well aware that Willie Walsh does not share our view but we are on the right side of the argument."

Villiers added that the extra growth outlined by the committee – an increase of around 60% on 2005 figures – could be taken up by regional airports rather than major hubs such as Heathrow. "There is a very real possibility of regional airports being left to wither on the vine."

The first signs of a schism within the aviation industry over who benefits from the 60% increase emerged today as Birmingham International Airport criticised the "preposterous" committee report.

Referring to the date when Heathrow launched as a commercial airport shortly after the second world war, Paul Kehoe, chief executive of the airport, said allocating the growth to Heathrow was a "1946 solution" to a modern problem.

"I find it difficult that we are developing a 2030 strategy with a 1946 solution. Heathrow sucks in traffic, we have to support it and if you don't support it you are made to look like climate change deniers."

Sparking an onstage row with Walsh, Kehoe added that Heathrow's importance as an international hub was dwindling in the face of economic growth in Asia.

"If China builds 94 airports they will not want to connect through Heathrow. Hubs are moving eastwards so let's connect through Dubai."

The environmental lobby continued to describe the committee report as a victory today despite its theoretical endorsement of a third runway.

Jeff Gazzard, a board member at the Aviation Environment Federation, said investors would refuse to back runway projects that had government limits on aviation growth hanging over them.

"The capital costs of expanding airports, particularly in London and the south-east, are firmly under the microscope as airport businesses will now have to invest and operate in a demand-constrained framework through to 2050 that must curtail their aggressive plans for Heathrow, Gatwick and Stansted," he said.